Deep in the Money

An option is deep in the money when its strike price is significantly advantageous relative to the current market price of the underlying asset. For a call, this means the strike is far below the spot price.

For a put, the strike is far above the spot price. Such options have very little extrinsic value because the probability of them ending out of the money is extremely low.

Consequently, their price moves almost one-to-one with the underlying asset, similar to owning the asset itself. Traders often use deep in the money options as a capital-efficient alternative to buying the underlying asset directly.

In crypto, these options are often used to leverage positions while minimizing the impact of time decay. They are essentially proxies for the underlying asset with built-in leverage.